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The RBI will remove Rs 2,000 notes from circulation

New Delhi:

The central bank has said it will withdraw Rs 2,000 notes from circulation and people can exchange or deposit them in their bank accounts by September 30. The Reserve Bank of India’s (RBI) 19 regional offices and other banks will start taking Rs 2,000 notes for exchange with lower denomination one from May 23. They will remain legal tender, the RBI said. 

The RBI has told all banks to stop issuing Rs 2,000 notes immediately.

The RBI started printing the Rs 2,000 note in November 2016 after Prime Minister Narendra Modi scrapped high-value Rs 1,000 and Rs 500 notes overnight.

“The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2000 banknotes was stopped in 2018- 19,” the RBI said in a statement.

“In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2,000 banknotes into banknotes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from May 23, 2023,” the RBI said.

The central bank said people can deposit or exchange for lower denomination notes till September 30 for up to Rs 20,000 at a time.

The RBI may extend the deadline from September 30 if needed, but even if anyone has a Rs 2,000 note after the current deadline, it will remain a valid tender, sources told NDTV today.

“About 89 per cent of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of four-five years. The total value of these banknotes in circulation declined from Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3 per cent of notes in circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent of notes in circulation on March 31, 2023,” the RBI said.

The central bank said this note is not commonly used for transactions. The RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.

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